Space Tourism Company 'Virgin Galactic' Cuts Workforce by 18% to Reduce Costs

3Q Weekly Net Loss of $0.28 Shows Resilience

Virgin Galactic, the space tourism company led by British billionaire Richard Branson, chairman of the Virgin Group, plans to cut about 18% (185 employees) of its total workforce to reduce costs, according to US financial media CNBC on the 8th (local time).

Virgin Galactic expects to save approximately $25 million (about 32.7 billion KRW) annually through this workforce reduction.

In its earnings announcement on the same day, Virgin Galactic reported a net loss of $105 million for the third quarter of this year, narrowing the deficit compared to $146 million in the same period last year. The loss per share, initially expected to be $0.43, was better than expected at $0.28.

During the same period, revenue surged 122% to $1.7 million, compared to $767,000 in the same quarter last year. The increase in revenue was due to the commencement of the first commercial spaceflights starting in June.

[Image source=AP Yonhap News]

The company set a revenue target of $3 million for the fourth quarter. However, the net loss is expected to increase as about $5 million in costs related to severance payments from the workforce reduction will be reflected in the fourth quarter.

Virgin Galactic also announced plans to suspend its spaceflight business next year to focus on developing the next-generation spacecraft. In a conference call following the earnings announcement, the company stated, "We will devote all our efforts to developing the next-generation Delta-class spacecraft."

Founded in 2004, Virgin Galactic went public on the New York Stock Exchange in October 2019 through a merger with a SPAC (Special Purpose Acquisition Company).

On the day, Virgin Galactic's stock closed at $1.56, down 10.34% from the previous close. The stock price had soared to $55.91 in June 2021 but declined due to delays in test flights and high uncertainty in the space development business, which worsened investor sentiment.

This content was produced with the assistance of AI translation services.